President s Student Advisory Board WSU Tuition. Joan King Associate Vice President and Chief University Budget Officer

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1 President s Student Advisory Board WSU Tuition Joan King Associate Vice President and Chief University Budget Officer April 15, 2015

2 State Budget Cycle Budgets are enacted on a two-year cycle, beginning on July 1 of each odd-numbered year. The biennial budget for begins on July 1, 2015 and ends on June 30, The biennial budget can be modified in any legislative session. These revisions are known as supplemental budgets.

3 State of Washington Biennial Budget Process - Operating Calculation of Agency Budgets at Carryforward Levels (Summer, Even Years) Revenue Estimates (Summer, Even Years, then updated throughout the process) Calculation of 601 Expenditure Limits (Summer, Even Years) Agency Budget Request (Summer, Even Years) Governor s Budget Recommendation (December, Even Years) House Budget (Spring, Odd Years) Senate Budget (Spring, Odd Years) Conference Committee Budget Passage by House Passage by Senate Signed by Governor Allotments to Agencies

4 Sources of Funds for Core University Functions State Appropriations Net Operating Tuition Facilities & Administrative (F&A) Fee on Grants All are used to fund the permanent budget of the University

5 Operating Budget Fund Sources Estimated Total: $1.8 Billion Net Investment Income - 5% Other 1% Gifts/Endowment 3% Federal Appropriations 1% *Net Operating Tuition & Fees 24% *State Appropriations 16% Net Restricted Student Fees 4% Auxiliary Enterprises 14% Federal Grants & Contracts 18% Ed Dept Sales & Services 2% Local Grants & Contracts 3% State Grants & Contracts 9% * Available for allocation

6 Operating Budget WSU Request Retention and Compensation for Faculty, Staff, and Graduate Students (4% each of the two years) $31.5M Medical Education in Spokane $ 2.5M Enrollment at the University Center of North Puget Sound $ 4.5M Enrollment at All Campuses $ 6.2M Maintenance and Operations for New Buildings $ 0.5M Small Business Development Center $ 1.2M Federal funds match Directed Reduction Package

7 Operating Budget Governor s Budget Proposal Highlights from the operating budget proposal released by Governor Inslee on December 18, 2014: Book 2 budget assumes approximately $1.4B in tax and revenue changes Assumes no tuition increase for resident undergraduates for both years of the biennium Provides $2M to support expansion of computer science and engineering graduates Provides $2.85M to the WSU Extension Energy program - $2.6M for expansion of voluntary energy and engineering audit programs and $0.25M for implementation of modifications to the renewable energy cost recovery program Transfers $3.98M to WSU for the management and operation of the University Center of North Puget Sound. Provides $0.78M for the study of long- and short-term effects of marijuana use

8 Operating Budget Governor s Budget Proposal (continued) Provides $1.52M in maintenance and operations funding (on a marginal basis) for new buildings Provides for wage increases for state employees of 3% effective July 1, 2015, and 1.8% effective July 1, 2016 Increases the state employee health insurance funding rate from $662/month to $913/month per employee in fiscal year 2016 and to $947/month per employee in fiscal year 2017 Assumes approximately 62% of the cost of wage and health insurance increases will be funded by tuition Increases funding for the state Opportunity Scholarship program to benefit an estimated 12,000 students annually Increases enrollment in the College Bound program by just over 5,500 students

9 Operating Budget Side-by-Side Comparison of Budget Proposals $ in millions WSU Request Governor Proposed Book 1 1 Governor Proposed Book 2 2 House Proposed 3 Senate Proposed Maintenance Level Retention, Compensation, Benefits $366.4 $361.7 $361.7 $361.4 $ Medical Education Reallocation of WWAMI Funding (9.4) - Expansion at Everett Enrollment at all Campuses Industrial & Farm Energy Audits Computer Science & Engineering College Affordability Program (Appropriation backfill for reduced tuition) Other

10 Operating Budget Side-by-Side Comparison of Budget Proposals (continued) $ in millions WSU Request Governor Proposed Book 1 1 Governor Proposed Book 2 2 House Proposed 3 Senate Proposed 4 Targeted Reductions (54.9) (36.3) Restoration of Reductions Total Biennial Budget (State Appropriations) $412.8 $339.9 $376.2 $380.7 $437.4 Assumed Tuition Increase FY 16: 0% FY 17: 0% FY 16: 0% FY 17: 0% FY 16: 0% FY 17: 0% FY 16: (-8%) FY 17: (-20%) 1 The Book 1 or current law budget is required by law and assumes no new revenue. 10% across-the-board cuts to higher education are assumed in this budget. 2 The Book 2 budget is the budget the Governor will advance to the Legislature and includes new revenues of approximately $1.4B for the biennium. 1&2 The table includes changes in state appropriations for each budget version. In addition, the Governor s budgets assume that $20M of maintenance level costs and the cost of wage and health insurance increases will be paid by tuition without allowing for any increase in tuition rates effectively resulting in a $20M budget cut for the biennium. 3 The House budget includes a total of $26.8M for WSU salary increases - $18.0M appropriated directly to WSU and $8.8M appropriated elsewhere in the budget. 4 The Senate budget seeks to recover $48.6M from state agencies through LEAN management strategies. WSU s share of such reduction, if any, is unknown at this time and is not included above.

11 Budget Outlook Higher education is the largest part of the state s discretionary budget. Overall state spending has increased nearly $8.7B since Overall spending on higher education has increased $156M in the same timeframe yet Washington public baccalaureate institutions have seen a $334M decrease in state funding.

12 Budget Outlook

13 State and Tuition Funding per FTE (in 2013 Dollars) $20,000 $18,000 $16,000 $14,000 $12,000 84% $10,000 $8,000 $6,000 59% 41% $4,000 $2,000 16% $0 FY2015 FY2014 FY2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 FY 2003 FY 2002 FY 2001 FY 2000 FY 1999 FY 1998 FY 1997 FY 1996 FY 1995 FY 1994 FY 1993 FY 1992 FY 1991 FY 1990 Total Funding Per Student State Support Per Student Tuition Revenue per Student Adjusted for inflation, the total cost of educating a student at WSU has remained steady during 20 years of declining state investments. Student tuition now covers 59% of the cost of education.

14 Tuition Tuition revenue, as defined by RCW 28B , includes the Building Fee and the Operating Fee. Building Fee Appropriated by the Legislature specifically for: Buildings Equipment Maintenance Other capital projects Operating Fee Supports the following major activities: Instruction, Research, Public Service Primary Academic Support Libraries Student Services Institutional Support Plant Operations and Maintenance Building and Operating Fee amounts vary by student category. For more information see the Tuition and Fees section of the Budget Office web site:

15 Regents Tuition Setting Authority AY : No tuition increase per university decision AY : No tuition increase per legislative mandate biennium: Governing boards were authorized to increase tuition (operating and building fees) For resident undergraduates - up to 16% per year* (authority established by Legislature in appropriations act each biennium) For all other categories of students - by any amount (authority in RCW) *Institutions had authority to go higher, triggering financial aid mitigation requirements

16 Tuition Academic Year Proposal Tuition will not increase for , subject to Legislative and Governor actions consistent with current tuition proposals in the House and the Senate.

17 Tuition Operating Fee Functional Usage FY 2014 Plant Operations & Maintenance 8.2% Institutional Support 13.3% Instruction 58.7% Student Services 5.3% Libraries 3.3% Primary Support 9.2% Public Service 0.5% Research 8%

18 Tuition Major Activities Supported by the Operating Fee Instruction, Research, Public Service Approximately 60% of tuition funding supports the faculty and staff directly delivering WSU s instruction, research, and service mission. These activities extend across the state at four campuses, five agricultural research centers, and at extension offices in every county. During these activities served approximately 25,000 undergraduate, graduate and professional students and produced 6,530 graduates (bachelor and advanced degree recipients) in Primary Academic Support Provides front-line supervision and support of instruction, research, and service activities in each college and campus, including course development and scheduling, advising for upper division students, program accreditation/certification, learning assessment, and performance reviews Other activities include online degree offerings, graduate student services, research compliance, and academic computing.

19 Tuition Major Activities Supported by the Operating Fee (continued) Libraries Supports staffing in library facilities across the four campuses. Provides funding for library acquisitions and collection maintenance. Student Services Provides essential services supporting students in their path to degree including admissions, financial aid, course registration, advising, counseling, career planning, recruitment, and study abroad. Institutional Support Provides support for the day-to-day operation and supervision of Washington State University. Key services include human resources, accounting, payroll, purchasing, information technology, student and financial information systems, institutional research, intellectual property, administration, and research compliance. Plant Operations and Maintenance Includes activities to operate and maintain four campuses, five agricultural research centers, and extension centers. Expenses include gas and electric utilities, building repair and upkeep, custodial, grounds keeping, waste management, police/campus safety, and environmental health and safety.

20 Use of Operating Budget By Expense Type State Appropriation and Operating Tuition Operations 18% Benefits 19% Salaries and Wages 63%

21 Mandatory Fees Mandatory Fees Rates by Campus Mandatory fees can vary by campus, depending on the needs of the students The annual mandatory fees for AY are listed below: Campus SRC Health Transit Stadium 1 CUB Everett Global Campus Pullman $306 $360 $53.90 $50 $240 Spokane - $ Tri-Cities Vancouver The Stadium fee applies to undergraduates only

22 Services and Activities Fees The term "services and activities fees" or S&A fees is defined to mean fees, other than tuition fees, charged to all students registering at a WSU campus, per RCW 28B S&A fees are used to fund student activities and programs, student buildings, and similar uses. S&A fees are charged to all students registering at a physical campus or via the Global Campus. Each campus has a student-led S&A Fees Committee that holds annual hearings with student groups requesting funding and makes allocation recommendations to the WSU President, with final approval by the Board of Regents at their May meeting. S&A fee allocations are published after Regents approval on the Budget Office web site: The S&A Fees Committee at each campus also recommends the S&A fee rate for their students on an annual basis.

23 Services and Activities Fees S&A Fees Rates by Campus Campus Annual Rate (FY 2014) Everett $512 Global Campus $512 Pullman $544 Spokane $522 Tri Cities $512 Vancouver $512

24 Mandatory Fees Technology Fee RCW ; (1) The governing board of each of the state universities, the regional universities, and The Evergreen State College, upon the written agreement of its respective student government association or its equivalent, may establish and charge each enrolled student a technology fee, separate from tuition fees.(2) Revenue from this fee shall be used exclusively for technology resources for general student use. (4) Annually, the student government association or its equivalent may abolish the fee by a majority vote. In the event of such a vote, the student government association or its equivalent shall notify the governing board of the institution. The fee shall cease being collected the term after the student government association or its equivalent voted to eliminate the fee.

25 Mandatory Fees Technology Fee (continued) (5) The student government association or its equivalent shall approve the annual expenditure plan for the fee revenue. (7) As used in this section, "technology fee" is a fee charged to students to recover, in whole or in part, the costs of providing and maintaining services to students that include, but need not be limited to: Access to the internet and world wide web, , computer and multimedia work stations and laboratories, computer software, and dial-up telephone services. (8) Prior to the establishment of a technology fee, a governing board shall provide to the student governing body a list of existing fees of a similar nature or for a similar purpose. The board and the student governing body shall ensure that student fees for technology are not duplicative.

26 Special Course Fees May be approved by the Fee Committee to cover directly related course expenses such as consumables, laboratory supplies, and field trips. Vary by course and not all courses have them.

27 Tuition Comments Comments on tuition may be provided April at:

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